The Australian dollar went back and forth during the course of the trading session on Tuesday in order to show signs of stability. It looks as if we are trying to find a little bit of a base for the short term, as the Aussie may have gotten a little bit oversold. At this point, if we do bounce from here, it is likely that we could see a lot of resistance just waiting to jump in at the 0.75 handle. Just above there, we have the 50 day EMA reaching towards the 200 day EMA in order to form a bit of a “death cross”, which of course makes longer-term traders look at this as a very negative market.
AUD/USD Video 28.07.21
If we do bounce from here, I believe that the 0.75 handle will be crucial. If we can break above there, then it could be an opportunity for the market to go much higher. That being said though, I do not think that the market is going to be easy to get above there, especially as Australia continues to lock itself down. With that being the case, the market is likely to see a lot of resistance.
On the other hand, if we were to break down below the lows that were made last week, it could send the Australian dollar down towards the 0.70 level that will attract a lot of attention. Ultimately, this is a market that I think continues to see a lot of negativity and therefore I am essentially just waiting for an opportunity to start selling again. At this point in time, I may simply have to sit on the sidelines before getting another opportunity.
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